Shareholders Act to Link Executive Pay to Worker Pay

CEOs now earn 419 times the
pay of average workers, up from 326 in 1997 and 42 in 1980

Opposition to out-of-control
executive pay now comes from investors as well as traditional opponents
on the other end of the wage gap. According to Business Week's
report on executive pay at major companies, released today, CEOs now earn
an astounding 419 times the pay of average blue-collar workers.

Responsible Wealth
is sponsoring seven shareholder resolutions to establish a maximum
ratio between the pay of the CEO and that of the lowest paid worker in
the company. Among them are three case studies in outrageous pay: Citigroup,
General Electric and Computer Associates.

Citigroup's
Sanford Weill is 1998's third-highest paid executive, with $167 million
in salary, bonus, realized stock option gains and other long-term compensation,
at a time when the newly merged company from Travelers and Citicorp began
laying off 10,400 workers. He's number 2 on Business Week's list
of executives who gave shareholders the least for their pay and number
5 on the list of executives whose companies performed the worst relative
to pay. Executive John Reed had a 138 percent pay increase to $9.5 million
from Citigroup last year. He also has another $88 million in unrealized
stock option gains. On April 20, 1999, in New York City, Citigroup shareholders
will vote on a resolution sponsored by Responsible Wealth to establish
a maximum ratio between the pay of the CEO and that of the lowest paid
worker in the company.

General Electric's
John Welch is the sixth-highest paid executive, with $83.7 million in
compensation. He's number 5 on Business Week's list of executives
who gave shareholders the least for their pay. GE shareholders will be
voting in Cleveland April 21 on another Responsible Wealth resolution
to establish a maximum ratio between CEO and worker pay.

The Wall Street
Journal says "Enough is Enough: Computer Associates offers
a cautionary example of high pay." CEO Charles Wang and other top
executives received stock grants for three years beginning in 1995 valued
at over $1 billion. Computer Associates had to take a $675 million charge
to cover the grant. According to compensation analyst Graef Crystal, the
charge "represented 43% of the company's after-tax profit for the
whole three years" the plan was in effect. Computer Associates shareholders
will be voting on a Responsible Wealth resolution to link CEO and worker
pay in Islandia, NY, in August.

"We're on our
way to generating 100 million votes for greater shared prosperity,"
says Scott Klinger, director of Responsible Wealth. "We already have
13 million votes on our first resolution on pay equity this year at RR
Donnelley." In addition to companies already mentioned, shareholder
resolutions initiated by Responsible Wealth will come to a vote at AT&T,
AlliedSignal, BankAmerica and BankBoston.

CEO pay shot up 36
percent last year, beating the S&P 500 increase of 26.7 percent, and
leaving blue-collar workers--who got a 2.7 percent raise--in the dust.
The CEO pay hike is even more outrageous when considering that workers
are still trying to make up the ground they've lost since 1973.

Shifting Fortunes:
The Perils of the Growing American Wealth Gap, a new UFE
report, finds that weekly wages for average workers in 1998 were 12 percent
below 1973, adjusting for inflation. Productivity grew nearly 33 percent
in the same period. Take someone earning $25,000 today: their 1973 counterpart
made about $3,400 more.

United for a Fair
Economy is also challenging this growing wage gap by urging members of
Congress to sign on to the Income Equity Act (HR 740), which would
cap the tax deductibility of executive compensation at 25 times the amount
of the lowest paid full-time worker in the firm, and advocating "Living
Wage" policies. Nineteen Living Wage ordinances around the United
States now require their municipal governments to do business only with
firms paying wages above the local minimum cost of living, and many more
campaigns for similar ordinances are now underway.

In May, United for
a Fair Economy will be releasing its annual report, Executive Excess,
produced with the Washington-based Institute for Policy Studies. The
report features executives who pocketed hefty pay packages while laying
off thousands of employees. In addition to Citigroup, the report will
highlight Black and Decker, whose CEO, Nolan Archibald enjoyed a huge
686 percent pay hike to $36.2 million as the company sawed off 3,000 employees
from the workforce.

To get a good picture
of the growing CEO-worker wage gap, imagine the Washington Monument. If
the real 555-foot Washington Monument reflects average 1998 CEO pay, then
a scaled-down replica representing average worker pay would be just 16
inches tall. In 1997, it was 21 inches. Back in 1980, the Workers Monument
was over 13 feet tall, reflecting a CEO-worker wage gap of 42 to one.

UFE co-director Chuck
Collins says, "In 1980, it would have required a pick-up truck to
transport the Workers Washington Monument. By 1996, you could carry it
on an airplane and put it in the overhead luggage bin. The 1998 Workers
Monument fits easily in my briefcase. It's time to reduce the wage gap
before we need a microscope to find the Workers Monument."

United for a Fair
Economy is a national organization that spotlights increased economic
inequality and offers positive solutions for shared prosperity. Responsible
Wealth, a UFE project, is a network of over 400 businesspeople, investors
and affluent individuals in the top 5 percent of income and wealth working
to reverse the trend of growing economic inequality.